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Netflix commissions Tidelands as its latest investment in local content.

Tidelands will debut exclusively on Netflix and premiere worldwide.

Netflix will film local shows in at least 13 different countries in 2017.

Netflix has commissioned Tidelands, a primetime drama series, as its latest investment in local Australian content. The supernatural crime drama follows co-productions on science investigation series White Rabbit Project, children’s shows Beat Bugs, Bottersnikes & Gumbles, Kazoops and Mako Mermaids: An H20 Adventure, supernatural drama Glitch, and the upcoming Legend of Monkey. Netflix also licenses Australian-grown TV content including Miss Fisher's Murder Mysteries and The Code as well as films Berlin Syndrome and Cargo for distribution worldwide.

Tidelands will debut exclusively on Netflix and premiere worldwide. First season will have 10 episodes that run for 50 minutes each. Production will start in Queensland, Australia during 2018 by Brisbane-based Hoodlum Entertainment. There is no release date for the new series.

Our analysis

US-based Netflix, which launched in Australia in March 2015, has come under fire from the Australian screen industry for its lack of original local content which bypasses the production quotas Australia’s free-to-air broadcasters must comply. As such, Australian film and TV industry bodies are calling for Australian TV content rules to be extended to new players including Amazon, Netflix and Stan.

Netflix’s local rival Stan has produced Australian original TV series Plonk, Wolf Creek, and two seasons of No Activity. Stan has also produced stand-up comedy series One Night Stan and has a feature film, The Second, in the works which will first debut in cinemas prior to its streaming service. Stan also has four new original series in development: The Other Guy, Merchants of Misery, All Thumbs and Chaperones.

Tidelands will be available through Netflix in 190 countries, which will help promote Australia for more TV and movie filming, showcase Australia as a tourism destination, expose local talent to a worldwide audience and create job opportunities for Australian film crews.

Despite the inherent advantages to the home country, Netflix’s intent to strengthen its local content portfolio is part of a wider expansion strategy to increase its international subscriber base. Netflix will produce 30 original movies in 2017 backed by $1 billion on marketing and $6 billion on original content production. Netflix is filming local shows in 13 different countries, including Australia, Brazil, France, India, Japan, South Korea and the US (see our recent insight report, Netflix Blazes Trail with ‘Global Local’ Production)..

Most recently, Netflix ordered its second French original series, the eight-episode sci-fi drama Osmosis. This is one of at least six new European original series that Netflix plans to announce in 2017. Netflix has committed more than $1.75 billion to European productions since entering Europe in 2012. In South Korea, Netflix’s original series Love Alarm and Kingdom are scheduled for release in 2018. Furthermore, the company’s latest Brazilian drama O Mecanismo is also filming in South America which follows the global popularity of its first Brazilian original show 3%.

Netflix had almost 98.9 million subscribers across the globe by the end of March 2017, an increase of 4.95 million net new subscribers on the previous quarter. This excludes the world’s most populous country, China where the service is not provided. However, Netflix will soon start licensing its original content to Chinese streaming companies following a deal signed with Chinese search giant, Baidu in April 2017. Deal allows Netflix’s original content to be accessed in China via Baidu’s online video portal iQiyi – a leading online video platform in China with almost 500 million users. Although its foray into China does not provide direct access to Chinese people, it is a good first step for Netflix to build relationships and gain visibility in the massive content market.

Netflix’s latest investment in local content production will find favour with Australian subscribers and industry alike. However, the move comes at the same time as the company experiments with a less appealing 20% price rise for the service. New Australian subscribers saw their subscription price rise as part of a weekend price experiment in May 2017. The price of the premium plan increased from A$14.99 to A$17.99 a month which the company claims was to better understand how consumers value the service. No official price rise has been announced but IHS Markit believes the timing of the announcement is no coincidence. Australia’s new law applying the Australian Goods and Services Tax (GST) to international sales of services and digital products provided to Australian consumers comes into effect 1 July 2017. This means overseas businesses such as Netflix will be required to pay the 10% GST on their sales which the company may pass onto its subscribers to offset the new tax.